Trade Opportunity — DAX Long
- John Nwatu MSTA CFTe
- 1 day ago
- 1 min read
Published: 21st May 2026
Background
Last week’s market report identified the DAX as a potential short — the thesis being that rising oil prices, driven by Strait of Hormuz uncertainty, would weigh on European equities through higher energy costs. That hypothesis has not played out. Oil prices have declined, and European stocks have responded in the opposite direction, presenting a clear technical buy opportunity on the DAX.
The Technical Case
The daily chart shows a completed five-wave impulse followed by a three-wave corrective structure — a textbook Elliott Wave setup indicating the correction is complete and the next leg of the advance is underway. Dropping to the one-hour chart, a five-wave impulse of lower degree is visible, providing further confirmation that price is positioned for further upside.
Supporting indicators reinforce the case: RSI momentum is increasing, and the moving average lines are diverging to the upside — both consistent with a trend resuming after a corrective pause.
Trade Parameters
Entry: 24,855
Target: 25,900 — 26,400
Invalidation: Close below 24,135
Risk to the Trade
The primary risk is geopolitical. The situation between Iran and the US remains fluid, and oil prices can reverse quickly. A sharp move higher in crude could reassert the original bearish thesis for European equities and invalidate this setup.
This is not financial advice. All trades carry risk. Always conduct your own analysis and manage position sizing appropriately.
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